Sharia Economic Observer: The Potential For Realization Of Islamic Social Finance In Indonesia Is Very Large

Islamic economic observer Irfan Syauqi Beik. (Photo: Doc. Antara)

JAKARTA - Islamic economic observer Irfan Syauqi Beik considers that the potential for the realization of Islamic social finance (KSI) in Indonesia is very large, so there needs to be an appropriate strategy to optimize it.

"The potential of Islamic social finance (KSI) is very large, but in terms of realization there is still a large gap," said Irfan, quoted from Antara, Friday, July 15.

Although the gap is still high, continued Irfan, the growth is extraordinary. This can be seen from the collection of zakat which has quadrupled in the last five years and cash waqf which has increased significantly, which is almost 300 percent during the 2011-2018 period compared to the 2018-2022 period.

Irfan said there are three strategies to optimize KSI in the country. First, to strengthen education and massive socialization of the KSI concept to the public.

The second strategy, he continued, is to strengthen KSI's institutions and human resources, including the digitalization aspect. While the third, strengthening regulations or policies related to the implementation of KSI.

In addition, said Irfan, KSI management institutions must also ensure the implementation of three types of accountability, namely financial accountability which is marked by the results of audits of financial statements with the title of WTP, accountability programs which are characterized by innovative programs that are able to empower the poor and can accessible to all parties, and ethical accountability related to the behavior and lifestyle of KSI managers.

Irfan also assessed the importance of digitalization in building public awareness and increasing the effectiveness of KSI fund management, from collection to distribution.

"Moreover, 52 percent of Indonesia's population are millennials and generation Z, who are very technology literate," he said.

Irfan expressed his hope that all parties would make KSI an important part of national development.

Previously, the Governor of Bank Indonesia (BI) Perry Warjiyo regretted that the realization of Islamic social finance (KSI) in Indonesia was still far from its existing potential, even though KSI contributed to supporting the economy and social welfare in the country.

"We have to reflect on what needs to be done to overcome this," said Perry in the 2022 G20 Indonesia Side Activity entitled "Optimizing Endowment Fund for Sustainable Financial Inclusion" in Nusa Dua, Badung, Bali, Thursday 14 July.